Quilter International experienced “subdued” levels of net client cash flow, which was down 75%, contributing to a 31% fall in inflows across the Quilter group during the six months ending 30 June 2018.
In its first set of results since listing on the London and Johannesburg stock exchanges, Quilter [formerly Old Mutual] reported assets under management and administration (AUMA) rose 2% to £116.5bn ($150.8bn, €130.2bn).
However, overall net client cash flow (NCCF) of £2.2bn was down 31% compared with £3.2bn in H1 2017.
The company largely attributed this to the pre-announced run off of its institutional life book within Quilter Life Assurance and the natural attrition of the rest of that book.
Strong flows from Quilter Investors were more than offset by weaker performances from Quilter International and Quilter Cheviot, down 75% and 17% respectively, compared with H1 2017.
The firm said that international markets remain challenging, “particularly given the changing regulatory environment”.
“However, the reduction in flows also reflects the group’s strategy to reduce its offshore geographic footprint and focus on the quality of new business.”
Remediation programme
The results state that Quilter is “making good progress in delivering our remediation programme for customers within our Quilter Life Assurance business”.
“We are still confident that the existing £69m provision established at year-end remains sufficient to meet the costs of remediation that we have identified as we have gone through the review process,” it stated.
The fund is to be paid to long-standing customers whose treatment by Old Mutual was called into question by the Financial Conduct Authority in 2016.
Other firms were also criticised for opaque exit fees and penalties.
Someway from demonstrating full potential
Chief executive Paul Feeney said: “We are focused on delivering what our customers want, an integrated wealth management offering that delivers good outcomes through the cycle. Our market offers significant growth opportunities and, while we have built a leading wealth management business, we are someway from demonstrating its full potential.
“Our priority now is to optimise the way we work to maximise the value of our integrated business for all our stakeholders over the coming years.”
Quilter announced a special interim dividend of £0.12 per share, “returning £221m from the sale of our single strategy business to our shareholders”.
